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ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.8, No.34, 2016
Abstract
This study examined the Impact of Management Information System (MIS) on Microfinance Banks (MFBs)
Operations in Oyo State, Nigeria. Specifically, the study examined the existing management information system
products that support microfinance banks operation and assessed the relationship between MIS and Microfinance
Banks’ operations.10 percent of the microfinance banks were selected using random sampling technique through
balloting. Primary data was collected with the aid of questionnaire, while sixty-six respondents from the
employees of the microfinance banks in Oyo State were selected. Descriptive statistics were employed to
examine the existing MIS products that support microfinance banks operation, while the relationship between
MIS and Microfinance Banks’ operations was assessed using inferential statistical tool of Pearson Product
Moment Correlation coefficients (PPMC).Results revealed that Short Messaging Service (SMS) was the
dominant MIS products that support Microfinance Banks operations in the study area. Also, there is significant
relationship between MIS and Microfinance Banks’ operations.
Keywords: MIS, MIS products, microfinance banks, Short Messaging Service.
1. Introduction
The idea of the Management Information System (MIS) has developed over a period of time encompassing
different aspects of the organizational task. Management Information System is an essential of all the organizations.
The early idea of Management Information System was to process data from the organization and offerings it in
the form of the report at steady intervals. The scheme was capable of handling the data from gathering to processing.
Previous researchers described Management Information system to be a series of processes and actions put up in
capturing raw data, analysing the data into usable information, while disseminating the information to users in the
form needed. To make decisions, management and shareholders need both the financial statements and various
other reports, particularly reports that present the activity of the loan portfolio. Also, numerous pointers can be
calculated to ease analysis of the Microfinance Banks in decision making process.
Microfinance is the delivery of a wide range of financial services which include savings, loans, payment
services, money transfers, and insurance to poor and low-income persons, households and their micro enterprises.
The services of microfinance are provided by three types of institutions which are Formal institutions, Semi-formal
institutions, and Informal sources.
Institutional microfinance is termed to mean microfinance services rendered by both formal and semi-
formal institutions whose main business is the delivery of microfinance services. Microfinance banks are licensed
and supervised by Central Bank of Nigeria (CBN) to provide microfinance services.
Lately, management information systems have arisen as a dominant device to lessen operating costs,
making it viable for financial institutions to expand to low-income areas. Information and Communication
Technology (ICT) can be a tactical tool in making Microfinance Institutions (MFIs) more proficient and efficient.
Although a few MFIs are making good use of technology, a good number are facing problems in getting the right
solution for reasons which include; risk of failure of the MIS, diversity of geography and language, insufficient
Organizational, human capacity and unavailability of suitable MIS, and high cost of information technology
solution. Research studies have shown significant and positive correlation between Information Technology (IT)
and banking performance (Mahmood and Garry 2000; Adewoye 2007; Keramati 2007).
Many Microfinance Banks use Management Information System (MIS) internally to support their
business operations and externally to deliver financial services to clients. MIS products implementation in key
functional areas such as Short Messaging Services (SMS banking), Automated Teller Machine (ATMs), Points of
Sales Transaction (POS), Close Circuit Television (CCTV) is still negligible or missing. There is dearth of research
on the impact of MIS on the MFBs operations in Nigeria, which forms the basis for this study. Therefore, the
extent to which MIS adoption has influenced Microfinance banks operation in Oyo state is the main focus of this
study.
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.8, No.34, 2016
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.8, No.34, 2016
• MIS offers full flexibility to design products and services to the needs of its aimed group.
• Staff efficiency and productivity is increased, as a result of the inherent ability to manage more products,
clients, and activities in less time.
• Introduction of new products and setting procedures is simple and can be rapidly applied all over the branch
network to meet target market.
• Through MIS, flexibility to integrate with other applications and delivery mechanisms is also provided.
4. Methodology
Seventy respondents were selected from the staff of the selected banks. The sampling technique used for this study
was scientific in nature, list of all Microfinance Banks in Oyo State which was divided into 5 areas was used in
the selection of sample size using clustered random sampling, and 10% of all Microfinance Banks in Oyo State
were considered using systematic sampling while simple random sampling was used to pick a total of 7 banks as
the sample size. 10 questionnaires were given to each bank to finally form 70 respondents for the study. Out of the
70 questionnaire distributed, a total of 66 were completed and returned, representing a response rate of 94 percent.
The justification for Oyo state was that hardly could you get to a local government council area without a sight of
a microfinance bank.
The source of data for the study was primary source, obtained directly from the selected sample of
respondents. Closed ended questionnaire, rated on a five points likerts scale rated from strongly agree to strongly
disagree was used.
Descriptive statistics of mean and standard deviation distribution was employed to examine the existing
MIS products that support Microfinance Banks operations in Oyo state. While, Pearson Product Moment
Correlation coefficients was selected to asses relationship between MIS and Microfinance Banks operations in
Oyo state, as it is used to measure the strength and direction of association that exist between two variables.
The model of the study and its specification is as displayed below:
Yit =α0 +β1 ATM it+ β2 POS it + β3 CCTV it+ β4 SMS+ eit
YPt = Operation, proxied by clients patronage
SMS = SMS Transaction Alert
ATM = Financial Service Enquiry
POS= Fund Transfer
CCTV=Video Surveillance
α0= Base Constant
eit= Stochastic errror term.
6. Conclusion
The study established that Short Messaging Service was the dominant management information system product
that supports microfinance banks operation in Oyo state, Nigeria. Also the result of the analysis indicates that
adoption of management information system has a positive impact on microfinance banks operation in Oyo State.
There are indeed significant relationships between management information system and microfinance banks
operations in Oyo State.
Arising from the above, it could be observed that the level of MIS products adoption by the Nigeria
microfinance banks is low. This implies that the two objectives of Outreach and Sustainability of microfinance are
been threatened, meeting the target needs, introduction of new products, and expansion to low-income area are
almost impossible.
From the findings above, it could be recommended to the operators and the policy makers of microfinance
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.8, No.34, 2016
banks that, progressive policies that make management information system products accessible and affordable
should be formulated by them so as to encourage the use of management information system within microfinance
banks and for the development of the banking subsector.
Further research suggested to be carried out to determine factors responsible for low level of management
information system products adoption by Nigerian microfinance banks.
References
Adewoye, J.O (2007), “Impact of Information Technology Investment on Banking Operations in Nigeria”, Journal
of International Review of Business Management, 1(4), 70-78.
CBN (2011), “Revised Microfinance Policy”, Regulatory and Supervisory Framework, for Nigeria, Abuja.
David, M.W. (2012), “The Impact of Information and Communication Technology on, Intermediation, Outreach,
and Decision Rights in the Microfinance Industry”, Arizona State University.
Jamil, B. (2008), “Microfinance as a tool for poverty alleviation in Nigeria" Paper Presented at Sensitization
Workshop on Microfinance Banking in Kano State, Nigeria.
Keramati, A. (2007), “Assessing the effects of information technology on firm performance using canonical
correlation analysis: a survey in Iran car part suppliers sector, XXI”, In International Conference on
Computer, Electrical, and Systems Science, and Engineering (CESSE2007), (pp. 392-399).
Maruthi R. P, Smith G. and Laxmi K.S (2011), “Emergency and Impact of Micro-Finance on Indian Scenario”,
KKIMRC IJRFA (1)
Mishra, B.L. and M. Chowbwy, (2012), “Impact assessment of technology Adoption in Microfinance in India”,
Journal of Chandragupt Institute of Management, Patna.
Rao, M (2004), “Microfinance & ICTs: Exploring Mutual Benefits and Synergy”, Orbicom.
Adewoye J. Oyerinde (M’87-SM’91- F’97) member, Certified Institute of Cost Management 1987, senior
member , Certified Institute of Cost Management 1991, fellow, Certified Institute of Cost Management in 1997.
Born in late 1950, Osun state Nigeria. Bagged B.sc (Econs) in 1982 from University of Port Harcourt, Port
Harcourt, and MBA in 1995 from Obafemi Awolowo, University, (OAU) Ile-Ife and Ph.D (Management Science),
2007 from Ladoke Akintola University of Technology, LAUTECH, Ogbomoso.
Adesokan J. Ayantoso (M’2010) member chartered Institute of Bankers of Nigeria 2010, Born in early 1970,
Oyo state Nigeria. Bagged B.tech (accounting) in 2006 Ladoke Akintola University of Technology, LAUTECH,
Ogbomoso, M.tech (finance) in 2016 from Ladoke Akintola University of Technology, LAUTECH, Ogbomoso.
Currently a Ph.D student, (Management Science), Ladoke Akintola University of Technology, LAUTECH,
Ogbomoso.
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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.8, No.34, 2016
APPENDIX 1
Table 1: Existing Management Information System products that Support Microfinance Banks Operation in Oyo
state.
Variables Obs Mean Std. Dev. Min Max
Existing MIS products in Mfbs in Oyo state 66 .91 .290 0 1
Dominant range of average customer base in 66 10,205.70 5768.036 1000 24,000
Mfbs in Oyo state
Number of Mfbs customer using SMS 66 9115.12 5751.452 0 17000
transaction alerts on their accounts
Number of ATM/cards issued by Mfbs in 66 0 0 0 0
Oyo state to customers in the last 5 years
Fund transfer transaction via POS in the last 66 2.27 13.677 0 100
5 years
Review of Surveillance recorded in CCTV in 66 24.85 69.575 0 260
the last 5 years by MFB.
Source: Field Survey, 2015.
Table 2: Correlation matrix showing relationship between management information system adoption and
microfinance banks operations.
MIS adoption and MIS adoption and MIS adoption and
MFBs operation MFBs operation MFBs operation
MIS adoption and MFBs 1.0000
operation
MIS adoption and MFBs 0.4533* 1.0000
operation
MIS adoption and MFBs 0.2523* 0.3360* 1.0000
operation
Source: Field Survey, 2015.
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